What Is Advance Tax And Do You Need To Pay It? – News18

Paying your taxes forward of the monetary 12 months’s finish is called advance tax or pay-as-you-earn scheme. This system helps the federal government keep a gradual earnings stream all year long. The deadline for the ultimate instalment of advance tax fee for the monetary 12 months 2023 – 2024 is March 15, 2024, by which date taxpayers should pay 100% of their advance tax legal responsibility.

What is an Advance Tax?

Advance tax is cash you pay forward of time in case you earn earnings from sources apart from your wage, like lease or inventory positive aspects. This applies to varied earnings like lottery prizes too. You pays it on-line or by means of particular banks.

• By fifteenth June: You have to pay not less than 15% of your whole estimated tax legal responsibility.
• By fifteenth September: You should pay 45% of the estimated tax legal responsibility.
• By fifteenth December: You ought to pay 75% of the estimated tax legal responsibility.
• By fifteenth March: You are required to pay the remaining steadiness to make it 100% of your estimated tax legal responsibility.

If your earnings estimates change in the course of the 12 months, you possibly can alter the quantity you pay. You can do that by means of the Income Tax Department’s on-line tax fee web site or the National Securities Depository.

Who Should Pay Advance Tax?

In India, in case you’re a salaried particular person, a freelancer, or a enterprise proprietor, and your whole annual tax legal responsibility quantities to Rs 10,000 or extra, you might be required to pay advance tax.

However, there’s an exception for senior residents aged 60 years or above who don’t function a enterprise – they aren’t obligated to pay advance tax. This exemption is particular to senior residents with out enterprise earnings.

For companies and impartial professionals like medical doctors, attorneys and designers, there are particular provisions often called presumptive taxation schemes. Under part 44AD, companies choosing this scheme should pay their complete advance tax quantity in a single instalment on or earlier than March 15. Similarly, impartial professionals coated underneath part 44ADA, who’re a part of the presumptive scheme, are additionally required to pay their complete advance tax legal responsibility in a single instalment by March 15. However, they do have the flexibleness to clear their tax dues by March 31 in the event that they select to take action.

What Forms Are Needed For Advance Tax?

To pay advance tax in India, you want to fill out Challan No. ITNS 280 on the desired due dates. When filling out this type, be certain to supply correct PAN particulars to stop your tax from being deposited in another person’s identify. Additionally, choose the proper evaluation 12 months for which the tax is being paid upfront for the upcoming monetary 12 months.

When making the fee, you should specify the kind of fee. If the tax is being paid for a similar monetary 12 months primarily based on estimated earnings, it’s thought-about advance tax. If the fee is made after the tip of the monetary 12 months, it’s labeled as a self-evaluation tax.

After the fee is accomplished, you’ll obtain a Challan Identification Number (CIN). It is essential to maintain a report of this quantity and use it when submitting your earnings tax return. Also, confirm with the Income Tax division to verify that the net fee made by means of ITNS 280 has been obtained efficiently.

Know How to Pay Advance Tax Online:

• Step 1: Go to the Income Tax Department’s official web site.
• Step 2: Click on the ‘e-pay Tax’ choice underneath ‘Quick Links’.
• Step 3: Enter your PAN and Mobile Number, then click on ‘Continue’.
• Step 4: Enter the OTP obtained in your cellular and click on ‘Proceed’.
• Step 5: Select the ‘Income Tax’ choice within the first tab and click on ‘Continue’.
• Step 6: Fill within the needed particulars, together with the proper evaluation 12 months, tackle, e mail tackle, telephone quantity, financial institution identify, and captcha code.
• Step 7: After filling within the particulars, you’ll be redirected to the financial institution’s Net Banking web page.
• Step 8: Review the fee particulars, together with your challan quantity.
• Step 9: Once the fee is made, it’s essential to report the fee to finish the method.